“The difficulties faced by the UK economy are not fully reflected in today’s growth figures. Living standards are falling, productivity growth is weak, and the economy has, in fact, been flat over the last year.

“It is likely that we are leaving recession but entering a period of unspectacular recovery – quite unlike the recovery from previous recessions.

“The UK has a long-term growth problem which it will not solve until government spending and taxation are reduced, the welfare state reformed and the extent of regulation on the private sector cut back. If the proportion of national income spent by the government returned even to 2005 levels, it is likely that the long-term growth rate would be 1% higher. Planning and labour market regulations as well as an incoherent approach to energy and financial regulation are all hampering growth and preventing living standards from rising.”

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